Bell Plans to Appeal CRTC Ruling

by Jordan Richardson on September 3, 2010

Ending what was a rough week for the incumbents, it looks like Bell Canada is stepping up to the plate against the recent CRTC ruling that would allow smaller internet providers room on the broadband networks of the Big Three.

Bell said that it would appeal the decision passed down by regulators on Monday. They’re taking the fight to cabinet just like they did when the CRTC made a similar decision in 2008. That time, the federal cabinet ruled in favour of Bell and the CRTC was sent off to “reconsider” the ruling.

“Cabinet accepted our appeal and asked the CRTC to look at this again,” said Mirko Bibic, Bell Canada’s executive vice-president of regulatory affairs. “I am astonished at how the CRTC can come back and give cabinet the very same decision that cabinet asked them to look at again. We are certainly going to be making our views well known.”

Cabinet will have 90 days to rule on the decision.

Bell’s Bibic claims that the decision, if allowed to stand, will negatively impact the company’s decision-making process when it comes to future investments in upgrades to their networks. Bibic says that the “right conditions” must exist in order for his company to see returns on investment. The notion here is that Bell won’t be able to afford to “do more” in terms of network upgrades and, as a result, the industry will stagnate.

It’s a similar power play to the game the Big Three typically trot out when they are ordered to generate advanced services for rural communities. Bell, Telus and Rogers complain about having to prop up the smaller companies and, as a result, not being able to invest in the infrastructure that they normally would were they not “babysitting” the small ISPs or providers. It’s a game that keeps Canada’s telecom sector reliant on the Big Three and it’s somewhat akin to blackmail.

The ruling from the CRTC in this case says that Bell must open up their lines between switching stations in neighbourhoods and homes. They can charge 10% more by way of mark-up, which serves as a sort of concession for the “good will” of the incumbents to let the new guys use the existing lines. For a new company, especially a small ISP, putting new lines into neighbourhoods proves difficult and complicated – especially considering the existing lines from, you guessed it, Bell, Telus or Rogers.

The CRTC’s ruling on the lines is that not only must they be made available but they must be entirely available. No limiting of the possible speeds or services available.

With Bell’s appeal already in the works, it’s doubtful that such a ruling will go through. Cabinet will probably once again side with the incumbents and the incumbents, for their part, will dangle the investment carrot yet again. Business will continue as usual for Canada’s telecommunications sector, with the Big Three’s stranglehold on consumers still intact.